Commodity Daily News

New Price High Despite Low Volatility

Crude oil prices moved higher yesterday despite low price volatility in the commodity. The price of spot crude oil climbed as high as $109.12 to close at $108.41 from an opening day price of $108.07. Yesterday traders shrugged off higher than expected US inventories as the weekly inventory report showed an increase of US stocks by 2.0M on expectations of 1.3M.

A noticeable decline in volatility has occurred this week as crude oil traders may need a new catalyst to send the commodity higher. The 20-day Average True Range has fallen to $2.10 from a high of $3.50 since the middle of March. Yesterday the commodity moved only $1.21.

Supply fears driven by the geopolitical events in the Middle East and Africa remain in the back of traders' minds as increasing economic growth is providing a bulk of the support for the crude oil gains. Despite short term indicators showing crude prices are overbought, forecasts remain for rising crude oil prices with a near term target at $121. Support is found at $107 and $102.